Last.fm To Google Music: Not So Fast

Last week CBS owned Last.fm announced that they would stop streaming songs on demand. They’ll also stop hosting videos for on demand streaming. Instead, according to the Last.fm blog, they’ll focus on connecting listeners to services that provide “jukebox-in-the-sky” on demand services, such as Spotify, MOG, and Hype Machine for songs, and VEVO for video.

Last.fm will also continue its personalized radio station streaming services, which provide listeners with the ability to interact, but not request specific songs.

This seems to be another step in CBSRadio’s 2010 journey to profitability in the streaming space. After a few years of streaming everything everywhere, this year CBSRadio is fine tuning its streaming business model and brand identity. Not long ago, CBSRadio began blocking its non-US listeners from streaming in order to control streaming and royalty expenses.

This move last week indicates that CBSRadio intends to focus on what it has determined are Last.fm’s core competencies. “Our scrobbling data shows that, for some time now, people have been using multiple music services and devices, then coming back to their Last.fm profiles to answer the question “what should I hear next?” and to see / show off all their listening united in one place.”

Some recent research has shown that free on demand streaming services are bad for online music sales. Here in the US, the record companies have blockedSpotify from entering the market with their free on demand service by refusing to license it. Instead, Spotify will likely turn to a monthly subscription model like MOG.

The new vision for Last.fm is perhaps even broader than it was: “our vision is for Last.fm to efficiently connect any user to ALL of the relevant streaming options in their country for every track we know about, as well as being able to personalise listening preferences Last.fm-wide.”

This seems to me like a smart move for Last.fm. CBSRadio has identified the best strength of Last.fm in that it connects listeners around and about music. They can do that, provide channel streaming services, and leave the tricky on-demand stuff to other services. It’s actually what Google Music is doing with Pandora and a few other services, except that Last.fm will be providing its own streaming option as well. Which Google Music is not doing (yet).